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Connecting the Unconnected – the Internet of Things in Logistics

Some 15 billion devices are connected to the Internet today. That figure is expected to be 50 billion in just five short years. Since many of us take the Internet and rapid technological development for granted these days, that increase might not grab your attention right away. But it should. We have entered a unique period in the life of the Internet – the Internet of Things (IoT) – that is going to transform our lives. And it’s going to revolutionize the logistics world.

Smart living

Let’s step back for a minute. What is IoT exactly? Put simply, it is the network of physical objects. But what used to be a network composed entirely of computers increasingly includes “things” that are not computers in the classic sense. In fact, these objects serve a multiplicity of other purposes. In your home these might be lighting, appliances, air conditioning and entertainment devices. In logistics we’re talking about pallets, trucks, and even street lights (the list is endless). All of these objects have potential to deliver vast amounts of information – “dark assets” – that we can “light up” and use for convenience, potential new insights and business value.

A connected pallet, for example, can tell its owner the whereabouts and condition of their shipment. A connected truck can intelligently predict its own maintenance needs. A connected street light can sense the presence of cars and send environmental intelligence to drivers.

It’s only the beginning

We are only at the beginning of the IoT revolution. So far, less than one percent of the roughly 1.5 trillion items on earth that could benefit from an IP address are currently connected. The average consumer in a developed nation is surrounded by dozens of connectable items. These include computers, consumer electronics, communication devices, home appliances, clothing and wearable devices, vehicles and much more. By the time we hit the 50 billion mark in 2020, we think computers (including PCs, tablets, and smartphones) will represent just 17 percent of all Internet connections. The rest will be the result of IoT.

“The Internet of Things will revolutionize decision making – we know that,” says Edzard Overbeek, Senior Vice President, Cisco Services. “By connecting the previously un- connected, we create incredible potential for businesses to improve the speed and accuracy of decision making through the analysis and application of digital information. It enables dramatically faster cycle times, highly dynamic processes, adaptive customer experiences and, through the ecosystem of people and technology, the potential for breakthrough performance gains.”

From parcels to people

IoT promises far-reaching payoffs for logistics operators and their business and end customers. These benefits extend across the entire logistics value chain, including warehousing operations, freight transportation, and last-mile delivery. And they impact areas such as operational efficiency, safety and security, customer experience, and new business models. IoT allows us to begin to tackle difficult operational and business questions in exciting new ways, such as:

  • monitor the status of assets, parcels, and people in real time throughout the value chain,
  • measure how these assets are performing, and effect change in what they are currently doing (and what they will do next),
  • automate business processes to eliminate manual interventions, improve quality and predictability, and lower costs.
  • optimize how people, systems, and assets work together, and coordinate their activities.
  • and ultimately, apply analytics to the entire value chain to identify wider improvement opportunities and best practices.

In essence, IoT in the world of logistics will be about “sensing and sense making.” The “sensing” part involves monitoring different assets within a supply chain through different technologies and mediums; “sense making” is concerned with handling the vast amounts of data sets that are generated as a result and then turning it into insights that drive new solutions.

It’s going to be a game changer, and a valuable one at that. Cisco estimates that IoT will deliver a $1.9 trillion boost to supply chain and logistics operations.

The time is now

But is this the right time to leverage IoT in logistics? We think so. The conditions are ripe for IoT to take off in the industry. There is a clear technology push through the rise of mobile computing, consumerization of IT, 5G networks and big data analytics, as well as a pull from customers who are increasingly demanding IoT-based solutions. Combined, these factors are enabling logistics providers to adopt IoT at an accelerating rate.

If you’d like to begin to understand the implication of IoT in logistics, read the latest DHL Trend-Report Internet of Things in Logistics . It explores a few of the many innovations presented by IoT and their application to the logistics industry.

I believe IoT has the potential to truly transform business practices across the entire value chain, and particularly the customer experience. It is clear that we are only at the beginning of what will certainly be an exciting journey for logistics innovation – a journey to connect the unconnected.

Deutsche Post DHL Group to foster global growth through pioneering innovation approach

2 Comments

  • Walter Bühring
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    Herrn
    Dr. Markus Kückelhaus
    DHL Trendforschungs-Team

    Sehr geehrter Herr Dr. Kückelhaus,
    mit Interesse habe ich die beiden Studien ‘Logistics Trend Radar’ und ‘Logistik 2050? gelesen. Dabei fiel mir auf, daß sich eingentlich nur der Beitrag von Prof. A. McKinnon ‘Ansätze für eine „Dekarbonisierung“ der Logistik’ ausführlicher mit dem eigentlichen Problemen des Landtransportes der Güter und im Beitrag im wesentlichen nur mit der CO2-Reduktion beschäftigt.
    Wer sich intensiv mit der Verteilung der Güter beschäftigt, müßte sich doch eigentlich auch mit Alternativen zu dem jetzigen Transportsystem mittels LKW (nicht nur in der örtlichen Verteilung) widmen.
    Das heutige und sicher schnell zunehmende Staugeschehen auf den deutschen Autobahnen führt das ‘Just in Time’ schon heute in Schwierigkeiten. Hinzu kommen die schnell wachsenden TEU-Zahlen bei der Container-Schifffahrt oder die Infrastrukturprobleme der Autobahnen (Brücke Leverkusen, Wiesbaden, Baustellen soweit das Auge reicht). Nicht zu sprechen von den an Wochenende stillgelegten LkW auf den Autobahnrastplätzen.
    Müßte sich nicht ihr Logistikunternehmen langfristig für eine containeresierte, automatisierte, eigenständige Transportverbindung zwischen den Logistikzentren stark machen? Da die Logistikzentren sich wie Perlen an den Autobahnen aufreihen, würde sich z.B. eine Technik, wie die in Deutschland erfundene und leider dann aufgegebene Transrapidtechnik anbieten. (heutige erfolgreiche Entwickler: Japan, China)
    Leider wurden die geplanten Transrapidlösungen für den Personentransport Hamburg-Berlin und Flughafen München aus politischen und nicht aus Kostengründen (keine Anbindung an den Hauptbahnhof in HH, überbordende Umwelt-Forderungen wie z.B. Vertunnelung in München) aufgegeben. Das Beispiel der (gewundenen) ICE-Strecke längs der Autobahn Köln-Frankfurt gibt die Hoffnung, daß eine aufgeständerte Transrapidlösung (go-green) für den Gütertransport und die Reduzierung des LKW-Verkehrs politisch durchsetzbar wäre. Die geforderte und dadurch mögliche Reduzierung der CO2-Belastung wäre gegeben.
    Wenn es sie nicht schon lange gibt, sehe ich einer Studie aus Ihrem Hause zu diesem Thema mit großen Interesse entgegen.
    Mit freundlichen Grüßen
    Walter Bühring
    (Mitglied in einem Kreis zur Förderung des Transrapid)

    Dr.-Ing. Walter Bühring
    Im Wingert 10
    53340 Meckenheim
    w.buehring@t-online.de

    • Markus Kückelhaus
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      Sehr geehrter Herr Dr. Bühring,

      DHL ist grundsätzlich bestrebt, CO2-einsparende Transportvarianten zu wählen und Verkehrsaufkommen innerhalb verschiedener Modalitäten von der Straße auf die Schiene zu bringen. Ein gutes Beispiel hierfür ist der Schienentransport von China nach Europa. Hierzu nutzen wir bestehende Infrastruktur und verknüpfen diese bestmöglich miteinander. Die Schaffung eigener Infrastruktur – wie sie für eine Transrapidstrecke notwendig wäre – würde jedoch unsere eigenen Möglichkeiten übersteigen und wäre daher eine gesamtgesellschaftliche Aufgabenstellung, die zudem die notwendigen politischen Rahmenbedingungen erfordern würde.

      Mit freundlichen Grüßen
      Dr. Markus Kückelhaus

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